Revenue From Software and Related Services Up 168% Over Prior Year
CHICAGO, Feb. 13 /PRNewswire-FirstCall/ — Allscripts (Nasdaq: MDRX), the
leading provider of clinical software, connectivity and information solutions
that physicians use to improve healthcare, today announced results for the
three months and year ended December 31, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b )
Total revenue for the three months ended December 31, 2006 was
$63.6 million, compared to $34.2 million for the same period last year. Total
revenue for the three months ended December 31, 2006 includes the results of
A4 Health Systems, Inc., which Allscripts acquired on March 2, 2006. Revenue
from software and related services for the three months ended December 31,
2006 was $48.9 million, compared to $18.2 million for the same period last
year, increasing by 168%.
Gross margin percentage was 53.5% for the fourth quarter of 2006, compared
to 45.5% during the fourth quarter of 2005.
Net income for the three months ended December 31, 2006 was $4.5 million,
or $0.08 per diluted share, compared to net income of $3.4 million, or
$0.08 per diluted share, for the same period last year. Reported net income
for 2006 reflects stock-based compensation pursuant to Allscripts adoption of
new accounting rules effective as of January 1, 2006 and reflects tax
provisioning and acquisition related amortization not included in prior
periods. In order to facilitate further comparison of results against periods
prior to January 1, 2006, Allscripts began reporting non-GAAP adjusted
earnings in 2006. Adjusted earnings are comprised of net income giving effect
to the add-back of income taxes, depreciation and amortization, stock-based
compensation and one-time A4 Health Systems integration costs. Such adjusted
earnings for the three months ended December 31, 2006 were $12.5 million, or
$0.21 per diluted share, compared to adjusted earnings of $5.7 million, or
$0.13 per diluted share, for the same period last year. Please see “Non-GAAP
Financial Measures” below for a discussion of non-GAAP adjusted earnings and
adjusted earnings per share.
As of December 31, 2006, the Company had cash and marketable securities of
$83.0 million.
“By virtually every measure, 2006 was a record year for Allscripts. We
extended our leadership across all segments of the market and proved that,
together with our clients, we can transform our healthcare system into an
interoperable, connected electronic network that lets physicians spend their
time with patients, not paperwork,” said Glen Tullman, Chief Executive Officer
of Allscripts. “As we move into 2007, healthcare’s challenges remain front-
page news and every trend supports the adoption of software and technology as
the solution. We’re just getting started in terms of market penetration, and
there’s lots of runway ahead.”
Total revenue for the year ended December 31, 2006 was $228.0 million,
compared to $120.6 million for 2005. Revenue from software and related
services for the year ended December 31, 2006 was $173.5 million, compared to
$65.2 million for 2005, increasing by 166%. Total revenue for the year ended
December 31, 2006 includes the results of A4 Health Systems from the
acquisition date of March 2, 2006 through the end of the fourth quarter of
2006.
Total gross margin percentage was 50.9% for the year ended December 31,
2006, compared to 45.5% for the year ended December 31, 2005.
Net income for the year ended December 31, 2006 was $11.9 million, or
$0.22 per diluted share, compared to net income of $9.7 million, or $0.23 per
diluted share, for 2005. Non-GAAP adjusted earnings for the year ended
December 31, 2006 was $39.2 million, or $0.74 per diluted share, compared to
adjusted earnings of $16.8 million, or $0.39 per diluted share, for the same
period last year.
Non-GAAP Financial Measures
Allscripts reports its financial results in accordance with generally
accepted accounting principles (“GAAP”). Allscripts management also evaluates
and makes operating decisions using various other measures. These measures are
generally based on revenues generated by Allscripts products and services and
certain costs of producing that revenue, such as costs of selling, general and
administrative expenses. One such measure is non-GAAP adjusted earnings, which
is a non-GAAP financial measure under Section 101 of Regulation G under the
Securities Exchange Act of 1934, as amended. Non-GAAP adjusted earnings
consists of GAAP income (loss) before taxes, excluding as applicable,
depreciation and amortization, stock-based compensation expense under SFAS No.
123R, realized losses on marketable securities and integration costs
associated with the March 2, 2006 acquisition of A4 Health Systems.
Management believes that it is useful in measuring Allscripts operations
to exclude, as applicable, depreciation and amortization, realized losses on
marketable securities and A4 Health Systems integration costs because these
costs are essentially fixed and cannot be influenced by management in the
short or medium term. In addition, management believes that excluding share-
based compensation expense under SFAS No. 123R is appropriate because this is
not a cash expense, but instead is a significant accounting charge that the
Company was not required to record for its share-based compensation awards
prior to 2006. Accordingly, management believes that excluding these items
from non-GAAP adjusted earnings will provide information that is more
generally comparable to prior periods and that reflects the Company’s core
operating results.
Management believes that non-GAAP adjusted earnings provides useful
supplemental information to management and investors regarding the performance
of the Company’s business operations and facilitates comparisons to our
historical operating results. Management also uses this information
internally for forecasting and budgeting as it believes that the measure is
indicative of the Company’s core operating results. Note however, that non-
GAAP adjusted earnings is a performance measure only, and it does not provide
any measure of the Company’s cash flow or liquidity. Non-GAAP financial
measures should not be considered as a substitute for measures of financial
performance in accordance with GAAP, and investors and potential investors are
encouraged to review the reconciliation of non-GAAP financial measures
contained within the attached condensed consolidated financial statements.
Allscripts will conduct a conference call on Tuesday, February 13, 2007 at
4:30 PM Eastern Time. The conference call can be accessed by dialing
1-888-644-5594 and requesting the Allscripts earnings call, or at
https://www.allscripts.com . A recording of the conference call will be
available three hours after the conclusion of the call for a period of two
weeks at https://www.allscripts.com or by calling 1-800-642-1687, ID #7427360.
About Allscripts
Allscripts is the leading provider of clinical software, connectivity and
information solutions that physicians use to improve healthcare. The Company’s
business groups provide unique solutions that inform, connect and transform
healthcare. The Clinical Solutions Group’s award-winning software applications
include electronic health record, practice management, electronic prescribing,
document imaging, emergency department and care management solutions.
Additionally, Allscripts provides clinical product education and connectivity
solutions for physicians and patients through its Physicians Interactive(TM)
Group and medication fulfillment services through its Medication Services
Group. To learn more, visit Allscripts on the Web at
https://www.allscripts.com .
This announcement may contain forward-looking statements about Allscripts
Healthcare Solutions that involve risks and uncertainties. These statements
are developed by combining currently available information with Allscripts
beliefs and assumptions. Forward-looking statements do not guarantee future
performance. Because Allscripts cannot predict all of the risks and
uncertainties that may affect it, or control the ones it does predict,
Allscripts’ actual results may be materially different from the results
expressed in its forward-looking statements. For a more complete discussion of
the risks, uncertainties and assumptions that may affect Allscripts, see the
Company’s 2005 Annual Report on Form 10-K, available through the Web site
maintained by the Securities and Exchange Commission at http://www.sec.gov .
Allscripts Healthcare Solutions, Inc. Condensed Consolidated Statements of Operations (amounts in thousands, except per-share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 Revenue: Software and related services $48,910 $18,249 $173,503 $65,166 Prepackaged medications 11,232 12,789 43,688 45,609 Information services 3,418 3,159 10,778 9,789 Total revenue 63,560 34,197 227,969 120,564 Cost of revenue: Software and related services 18,704 6,908 70,351 23,507 Prepackaged medications 9,419 10,873 36,263 38,046 Information services 1,421 849 5,417 4,136 Total cost of revenue 29,544 18,630 112,031 65,689 Gross profit 34,016 15,567 115,938 54,875 Operating expenses: Selling, general and administrative expenses (a) 23,952 12,068 85,798 43,908 Amortization of intangibles 2,576 436 10,272 1,744 Income from operations 7,488 3,063 19,868 9,223 Interest expense (937) (880) (3,712) (3,516) Interest income 813 1,230 3,308 4,128 Other expense, net (11) (10) (145) (125) Income before income taxes 7,353 3,403 19,319 9,710 Income taxes (2,870) - (7,424) - Net income $4,483 $3,403 $11,895 $9,710 Net income per share - basic $0.08 $0.08 $0.23 $0.24 Net income per share - diluted $0.08 $0.08 $0.22 $0.23 Weighted average shares of common stock outstanding used in computing basic net income per share 53,958 40,812 51,058 40,045 Weighted average shares of diluted common stock outstanding used in computing diluted net income per share (b) 63,954 43,890 53,367 43,068 (a) Includes stock-based compensation of $888 and $558; and $2,328 and $604, for the three months ended and for the year ended December 31, 2006 and 2005, respectively. (b) Weighted average shares for the three months ended December 31, 2006 include 7,329 common shares related to the Company's 3.5% Senior Convertible Notes. Such shares were antidilutive for all other periods presented. Allscripts Healthcare Solutions, Inc. Reconciliation of Non-GAAP Measure of Adjusted Earnings and Adjusted Earnings Per Share (amounts in thousands, except per-share amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 2006 2005 2006 2005 Net income, as reported $4,483 $3,403 $11,895 $9,710 Add back: Income taxes 2,870 - 7,424 - Depreciation and amortization 4,285 1,746 16,461 6,528 Stock-based compensation 888 558 2,328 604 Realized losses on marketable securities (a) - - 118 - A4 Health Systems integration costs - - 1,021 - Adjusted earnings 12,526 5,707 39,247 16,842 Add back: Interest expense and debt cost amortization 872 (b) (b) (b) Adjusted earnings for adjusted diluted EPS calculation $13,398 $5,707 $39,247 $16,842 Adjusted earnings per share - basic $0.23 $0.14 $0.77 $0.42 Adjusted earnings per share - diluted $0.21 $0.13 $0.74 $0.39 Weighted average shares of common stock outstanding used in computing basic adjusted earnings per share 53,958 40,812 51,058 40,045 Weighted average shares of common stock outstanding used in computing diluted adjusted earnings per share (c) 63,954 43,890 53,367 43,068 (a) -- Realized losses incurred as a result of the early maturity of marketable securities due to cash requirements related to the acquisition of A4 Health Systems, Inc. (b) -- Not applicable due to convertible shares being antidilutive for GAAP earnings per share purposes. (c) -- Weighted average shares for the three months ended December 31, 2006 include 7,329 common shares related to the Company's 3.5% Senior Convertible Notes. Such shares were antidilutive for all other periods presented. Allscripts Healthcare Solutions, Inc. Condensed Consolidated Balance Sheets (amounts in thousands) (Unaudited) December 31, December 31, Assets 2006 2005 Current assets: Cash and cash equivalents $42,461 $60,905 Marketable securities 14,553 54,408 Accounts receivable, net 55,579 29,746 Deferred taxes, net 27,437 - Inventories 3,247 2,174 Prepaid expenses and other current assets 10,620 5,811 Total current assets 153,897 153,044 Long-term marketable securities 26,024 30,750 Fixed assets, net 14,094 2,753 Software development costs, net 12,285 6,409 Intangible assets, net 78,050 9,151 Goodwill 188,261 13,760 Other assets 4,999 5,097 Total assets $477,610 $220,964 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $9,294 $8,630 Accrued liabilities 26,546 13,791 Deferred revenue 35,549 17,306 Current portion of long-term debt 258 - Total current liabilities 71,647 39,727 Long-term debt 85,441 82,500 Deferred income taxes 3,915 - Other liabilities 357 318 Total liabilities 161,360 122,545 Stockholders' equity 316,250 98,419 Total liabilities and stockholders' equity $477,610 $220,964
SOURCE Allscripts -0- 02/13/2007 /CONTACT: Dan Michelson, Chief Marketing Officer, +1-312-506-1217, dan.michelson@allscripts.com , or Todd Stein, Senior Manager-Public Relations, +1-312-506-1216, todd.stein@allscripts.com , or Bill Davis, Chief Financial Officer, +1-312-506-1211, bill.davis@allscripts.com , all of Allscripts/ /Photo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com/ /Web site: https://www.allscripts.com / (MDRX) CO: Allscripts ST: Illinois IN: MTC HEA CPR STW SU: ERN CCA JR-AM -- CGTU052 -- 6741 02/13/2007 16:01 EST http://www.prnewswire.com